The evolution of modern-day money

“We’re short of gold, well fine, so fetch some then,” the emperor tells Mephistopheles in Goethe’s Faust, Part Two. He does not anticipate the wheels he sets in motion. Mephistopheles proceeds to action and literally fires up the money printing press. But the backing of his new paper money is powerful: up until then, the gold used to strike coins had born the value of its own material. Now, “as a secure pledge“, the banknotes are backed by mineral resources, which the emperor lays claim to as a precautionary measure, that have not yet been extracted, but are assumed to exist. The ruler himself deems this a scam and candidly ponders why anyone would accept the paper money in the first place. But his printed word is valid and the kingdom’s financial issues appear to have been resolved. We, as enlightened people, of course know: this will not succeed in the long run. And indeed, a little later, the Three Mighty Warriors enter the stage: Bullyboy, Grab-quick und Hold-tight, the epitomes of violence, avarice, and greed.

So much for the literary background. Throughout the course of history, money certainly did not just appear with the flick of a wand. However, there is one thing Goethe did not get completely wrong: it was in the early modern period, around 1600, that money, as we know it today, developed.

During the Middle Ages and in all pre-modern societies – e.g. in ancient Greece, in Rome, and in Celtic tribes – these forms of payment were partof the general economy, but they were only one part of it after all. They lacked the all-encompassing nature they adopted in the modern period. Back in the day, economy served the purpose of providing all of the essentials. Along with purchasing items by using money, people also exchanged goods and produced a lot of what was needed on their own.

Just as the emperor in Faust complained, modern-day economy cannot get enough of money. In our modern societies, money defines the value of everything and is the only factor that enables the general supply of goods. Those who do not own any money are practically excluded from any form of societal participation and, ultimately, survival. Vast amounts of money are needed. This unprecedented constellation of modern-day economy allowed for money to multiply of its own accord as capital that reproduces itself in sometimes inexplicable and seemingly magical ways.

The Swiss sociologist Adlo Haesler has been conducting research on this topic for forty years. He has already published several monographs that include thought-provoking ideas worth following and analyzing further. The linguist and literary scholar Eske Bockelmann, too, has opened a window that allows us to approach this topic from a completely different point of view. He connects the development of our present-day understanding of beat and rhythm to the altered significance and role of money in the modern period. While it goes without saying that we equate the rhythm of a musical piece with its beat, people perceived it in an entirely different way until 1600!

This field is particularly relevant and pivotal as it does not only concern the question of how capitalist economic activities developed. It is also the basis for other questions the Sunflower Foundation is seeking answers to: How does this way of using money affect societies? How does it affect us as individuals?

At the end of the story, Faust is saved, because as the angels cry: “Whoever strives, in his endeavor, We can rescue from the devil.” But what do we want this striving to look like and where do we want it to go in terms of monetary economy? This remains a far-reaching field of research.